oversight

Alliance Community Hospital, Special Purpose Grants, Alliance, Ohio

Published by the Department of Housing and Urban Development, Office of Inspector General on 2001-05-03.

Below is a raw (and likely hideous) rendition of the original report. (PDF)

           AUDIT REPORT




       ALLIANCE COMMUNITY HOSPITAL
          SPECIAL PURPOSE GRANTS

              ALLIANCE, OHIO

                2001-CH-1006

                MAY 3, 2001



           OFFICE OF AUDIT, MIDWEST
               CHICAGO, ILLINOIS




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                                                                         Issue Date
                                                                            May 3, 2001

                                                                         Audit Case Number
                                                                            2001-CH-1006




  TO:             Preston A. Pace, Jr., Director of Columbus Multifamily Hub, Ohio State Office

                      /signed/
  FROM:           Dale L. Chouteau, District Inspector General for Audit, Midwest

  SUBJECT:        Alliance Community Hospital
                  Special Purpose Grants
                  Alliance, Ohio

  We completed an audit of three Special Purpose Grants awarded to the Alliance Community Hospital.
  The three Grants were: OH12-SPG-32 for $1,250,000; OH12-SPG-509 for $1,500,000; and OH12-
  SPG-517 for $500,000. The audit was conducted in response to a request from HUD’s Director of
  the Cleveland Multifamily Program Center. The objectives of our audit were to determine whether: the
  Special Purpose Grants funds were used efficiently and effectively; and the Hospital complied with the
  terms of the Grant Agreements.

  The Hospital generally administered two of the three Special Purpose Grants (OH12-SPG-32 and
  OH12-SPG-509) correctly. However, the Hospital did not use funds from Special Purpose Grant
  OH12-SPG-517 efficiently and effectively and failed to comply with the Grant Agreement. Specifically,
  the Hospital: improperly used $6,065 in Grant funds to pay part of two employees’ salaries and fringe
  benefits for time they spent working on non-Grant activities; used $5,490 in Grant funds to pay an
  employee’s salary and fringe benefits without supporting documentation; and used $87,883 in Grant
  funds to pay the salary and fringe benefits expenses of the Hospital’s Vice President of Strategic
  Management but the expenses were not permitted by the Grant Agreement.

  We also found that the Hospital: received $21,035 in program income from businesses participating in
  its Corporate Health Alliance activity funded by Special Purpose Grant OH12-SPG-517 but the
  income was not used to support the Grant; failed to use sound management principles when it did not
  charge itself for $10,989 in Grant services provided to its employees; and used $8,926 in Grant funds
  for: public relations items that did not specifically promote its Grant activities, and training and travel
  expenses for individuals that were not employed by the Hospital.




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  Management Memorandum


  Within 60 days, please provide us, for each recommendation made in this report, a status report on: (1)
  the corrective action taken; (2) the proposed corrective action and the date to be completed; or (3)
  why action is considered unnecessary. Also, please furnish us copies of any correspondence or
  directives issued because of the audit.

  Should you or your staff have any questions, please have them contact me at (312) 353-7832 or Heath
  Wolfe, Assistant District Inspector General for Audit, at (312) 353-6236 extension 2677.




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  Executive Summary
  We completed an audit of three Special Purpose Grants awarded to the Alliance Community Hospital.
  The three Grants were: OH12-SPG-32 for $1,250,000; OH12-SPG-509 for $1,500,000; and OH12-
  SPG-517 for $500,000. The objectives of our audit were to determine whether: the Special Purpose
  Grants funds were used efficiently and effectively; and the Hospital complied with the terms of the Grant
  Agreements. The audit was conducted in response to a request from HUD’s Director of the Cleveland
  Multifamily Program Center.

  The Hospital generally administered two of the three Special Purpose Grants (OH12-SPG-32 and
  OH12-SPG-509) correctly. However, the Hospital did not use funds from Special Purpose Grant
  OH12-SPG-517 efficiently and effectively and failed to comply with the Grant Agreement.


                                          The Hospital did not follow Special Purpose Grant Agreement
       The Hospital Improperly            OH12-SPG-517, HUD’s regulation, and/or Office and
       Used Grant Funds To Pay            Management Budget Circular A-87 when it used Grant funds to
       Personnel Expenses                 pay employees’ salaries and fringe benefits. Specifically, the
                                          Hospital improperly used $6,065 in Grant funds to pay part of
                                          two employees’ salaries and fringe benefits for time they spent
                                          working on non-Grant activities. Additionally, the Hospital
                                          used $5,490 in Grant funds to pay an employee’s salary and
                                          fringe benefits without supporting documentation. The Hospital
                                          did not maintain periodic certifications that the employee
                                          worked solely on Grant activities, or personnel activity reports
                                          to support whether the employee’s time was spent on Grant or
                                          non-Grant activities. The Hospital also used $87,883 in Grant
                                          funds to pay the Vice President of Strategic Management’s
                                          salary and fringe benefits that were not permitted by the Grant
                                          Agreement.

                                          The Hospital did not follow Special Purpose Grant Agreement
       The Hospital Did Not               OH12-SPG-517 and HUD’s regulation to ensure that income
       Ensure That $21,035 In             directly generated by the Grant was used to support other
       Program Income Supported           Grant activities. The Hospital provided health care services to
       The Grant’s Activities             businesses participating in its Corporate Health Alliance activity
                                          that was funded by the Special Purpose Grant. Between
                                          January 1997 and January 1998, the Hospital received
                                          $21,035 in program income from the businesses that was not
                                          used to support the Grant.




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  Executive Summary


                                   Contrary to Special Purpose Grant Agreement OH12-SPG-
       The Hospital Did Not        517 and Office of Management and Budget Circular A-87, the
       Charge For $10,989 In       Hospital failed to use sound management principles when it did
       Grant Services              not charge itself for Grant services provided to its employees.
                                   The Hospital provided $10,989 in health care services to its
                                   employees and members of the Hospital’s Wellness Center for
                                   Women that participated in the Corporate Health Alliance
                                   activity funded by the Special Purpose Grant. However, the
                                   Hospital did not charge for the services.

                                   Contrary to Special Purpose Grant Agreement OH12-SPG-
       The Hospital’s Use Of       517 and Office of Management and Budget Circular A-87, the
       Special Purpose Grant       Hospital used $8,926 in Grant funds for: public relations items
       Funds Did Not Support Its   that did not specifically promote its Grant activities, and training
       Grant Activities            and travel expenses for individuals that were not employed by
                                   the Hospital.

                                   We recommend that HUD’s Director of the Columbus
       Recommendations             Multifamily Hub, Ohio State Office, require the Hospital to
                                   reimburse the Special Purpose Grant OH12-SPG-517 for the
                                   questioned disbursements and program income, and assure that
                                   the Hospital implements procedures and controls to correct the
                                   weaknesses cited in this report.

                                   We presented our draft findings to the Hospital’s Chief
                                   Financial Officer and HUD’s staff during the audit. The
                                   Hospital’s Chief Executive Officer declined our offer for an exit
                                   conference; however, the Chief Financial Officer did provide
                                   written comments to the draft findings. The Hospital agreed to
                                   reimburse the Special Purpose Grant OH12-SPG-517 for the
                                   improper use of Grant funds to pay personnel expenses, public
                                   relations items, training and travel expenses, and for the
                                   program income that was not used to support other Grant
                                   activities. The Hospital also agreed to implement procedures
                                   and controls to ensure that it follows Special Purpose Grant
                                   Agreement OH12-SPG-517, HUD’s regulations, and/or Office
                                   of Management and Budget Circular A-87 regarding the use of
                                   Grant funds. The Hospital made no comment to reimburse the
                                   Special Purpose Grant OH12-SPG-517 for the $10,989 in
                                   Grant services that were provided to the Hospital’s employees,
                                   but was not charged.



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                                               Executive Summary


       We included paraphrased excerpts of the Hospital’s comments
       with each finding. The complete text of the comments is in
       Appendix B.




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  Table Of Contents

  Management Memorandum                                                i



  Executive Summary                                                   iii



  Introduction                                                        1



  Findings

  1    The Hospital Improperly Used Grant Funds To Pay
       Personnel Expenses                                             3


  2    The Hospital Did Not Ensure That $21,035 In Program
       Income Supported The Grant’s Activities                        9


  3    The Hospital Did Not Charge For $10,989 In Grant
       Services                                                      13


  4    The Hospital’s Use Of Special Purpose Grant Funds
       Did Not Support Its Grant Activities                          17



  Management Controls                                                21



  Follow Up On Prior Audits                                          25



  Appendices

       A Schedule Of Questioned Costs                                27



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          B Auditee Comments               29

          C Distribution                   33




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  Introduction
  HUD awarded the Alliance Community Hospital three Special Purpose Grants between January 1993
  and December 1994. The three Grants were: OH12-SPG-32 for $1,250,000; OH12-SPG-509 for
  $1,500,000; and OH12-SPG-517 for $500,000. As of March 20, 2001, the Hospital used all the
  Grant funds from OH12-SPG-32 and OH12-SPG-517, and the Hospital expended $215,148 in Grant
  funds from OH12-SPG-509.

  The OH12-SPG-32 Grant was awarded to pay for construction costs to connect the Hospital’s main
  building to an extended care facility operated by the Hospital. Additionally, the Hospital was to use the
  Grant funds to purchase 11 ventilator units to assist patients residing in the facility. The Hospital
  completed the construction work and the purchase of the ventilator units in 1995.

  HUD awarded the OH12-SPG-509 Grant to the Hospital to purchase land and construct an assisted
  living center for elderly individuals. The center is expected to include 25 to 35 units that will
  accommodate 25 to 42 elderly individuals. As of February 2001, the Hospital had completed the
  purchase of the land; however, construction work had not started on the center.

  The OH12-SPG-517 Grant was awarded to the Hospital to establish a Corporate Health Alliance
  activity to address heart disease, cancer, and stroke among area residents. The Hospital planned to
  assist 12,500 residents through the activity. The Hospital continued to fund the activity after all of the
  Grant funds were used.

  The Hospital was incorporated under the laws of the State of Ohio in October 1946. The Hospital is
  governed by a 22 member Board of Trustees. Stan W. Jonas is the Chief Executive Officer. The
  Hospital’s official records for the Grants are located at 264 East Rice Street, Alliance, Ohio.


                                          The audit objectives were to determine whether: the Special
       Audit Objectives                   Purpose Grants funds were used efficiently and effectively; and
                                          the Hospital complied with the terms of the Grant Agreements.

                                          We conducted the audit at HUD’s Cleveland Area Office and
       Audit Scope And                    the Hospital’s office. We performed our on-site audit work
       Methodology                        between November 2000 and March 2001.

                                          To determine whether the Hospital used its Special Purpose
                                          Grants funds efficiently and effectively and complied with the
                                          terms of the Grant Agreements, we interviewed HUD’s staff
                                          and the Hospital’s current and formeremployees. We analyzed
                                          the following items: Grants files; cash receipts, disbursements,
                                          and general ledgers; vendor invoices and contracts; employee
                                          payroll records and job descriptions; equipment records; and

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  Introduction


                 audited financial statements. We also reviewed: HUD’s files for
                 the Hospital; the Special Purpose Grant Agreements (OH12-
                 SPG-32, OH12-SPG-509, and OH12-SPG-517) between
                 HUD and the Hospital; Part 84 of Title 24 of the Code of
                 Federal Regulations, Grants and Agreements with Institutions of
                 Higher Education, Hospitals, and other Non-Profit
                 Organizations; Office of Management and Budget Circular A-
                 87; HUD’s Appropriations Act for 1995; and the House of
                 Representatives Conference Reports 102-226 and 103-715.

                 The audit covered the period from May 1, 1995 to October
                 31, 2000. This period was adjusted as necessary. We
                 conducted the audit in accordance with generally accepted
                 government auditing standards.

                 We provided a copy of this report to the Hospital's Chief
                 Executive Officer.




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                                                                                                   Finding 1


       The Hospital Improperly Used Grant Funds To
                 Pay Personnel Expenses
  The Alliance Community Hospital did not follow Special Purpose Grant Agreement OH12-SPG-517,
  HUD’s regulation, and/or Office and Management Budget Circular A-87 when it used Grant funds to
  pay employees’ salaries and fringe benefits. Specifically, the Hospital improperly used $6,065 in Grant
  funds to pay part of two employees’ salaries and fringe benefits for time they spent working on non-
  Grant activities. Additionally, the Hospital used $5,490 in Grant funds to pay an employee’s salary and
  fringe benefits without supporting documentation. The Hospital did not maintain periodic certifications
  that the employee worked solely on Grant activities, or personnel activity reports to support whether the
  employee’s time was spent on Grant or non-Grant activities. The Hospital also used $87,883 in Grant
  funds to pay the Vice President of Strategic Management’s salary and fringe benefits that were not
  permitted by the Grant Agreement. The Hospital did not have sufficient procedures and controls over
  the Special Purpose Grant to ensure funds were used properly. As a result, HUD funds were not used
  effectively and efficiently.


                                          Article I, paragraph E, of Special Purpose Grant Agreement
       Federal Requirements               OH12-SPG-517, between HUD and the Alliance Community
                                          Hospital, required the Hospital to follow the requirements of
                                          Office of Management and Budget Circular A-87, Cost
                                          Principles for State, Local, and Indian Tribal Governments.
                                          Paragraph I of the Agreement required the Hospital to follow
                                          other applicable regulations, such as 24 CFR Part 84, Grants
                                          and Agreements with Institutions of Higher Education,
                                          Hospitals, and other Non-Profit Organizations.

                                          Office of Management and Budget Circular A-87,Attachment
                                          A, paragraph C(1)(a), requires that all costs must be necessary
                                          and reasonable for proper and efficient administration of
                                          Federal Awards. In addition, paragraph C(1)(j) requires all
                                          costs to be documented. Attachment B(11)(h)(3) of the
                                          Circular says where employees are expected to work solely on
                                          a single Federal award, charges for their wages will be
                                          supported by periodic certifications that the employees worked
                                          solely on that program for the period covered by the
                                          certification. Paragraph (4) states where employees work on
                                          multiple activities, a distribution of their wages will be supported
                                          by personnel activity reports or equivalent documentation.
                                          Such documentary support will be required where employees
                                          work on a Federal award and a non-Federal award.

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  Finding 1


                                  24 CFR Part 84.25(b) requires grant recipients to report
                                  deviations from budget and program plans, and request prior
                                  approval for budget and program revisions. Part 84.25(c)(2)
                                  states that for non-construction awards, grant recipients will
                                  request prior approvals from HUD for a change in a key person
                                  specified in the application or award document.

                                  Contrary to Office of Management and Budget Circular A-87,
       The Hospital Lacked        the Alliance Community Hospital used Special Purpose Grant
       Documentation To Support   funds to pay employees’ salaries and fringe benefits without
       Personnel Expenses         supporting documentation.

                                  In 1994, HUD awarded a $500,000 Special Purpose Grant to
                                  the Alliance Community Hospital. The Grant was awarded to
                                  establish a Corporate Health Alliance to address heart disease,
                                  cancer, and stroke prevention among industrial workers. The
                                  Hospital used part of the Grant funds to pay for its employees’
                                  salaries and fringe benefits to carry out the Grant’s activities.

                                  The Hospital lacked documentation to support employees’
                                  salaries and fringe benefits charged to the Special Purpose
                                  Grant between December 1995 and August 1998. The
                                  Hospital did not maintain periodic certifications to verify that
                                  employees worked solely on the Grant’s activities as required
                                  by the Grant Agreement and Office of Management and Budget
                                  Circular A-87. The Hospital used a total of $185,948 in Grant
                                  funds to pay 100 percent of the salaries and benefits of its
                                  Wellness Services Directors, Coordinators, and a Program
                                  Assistant.

                                  To determine the amount of time the Hospital’s employees
                                  spent working on the Special Purpose Grant, we interviewed
                                  the employees and reviewed their position descriptions when
                                  possible. For the employees that we were unable to interview,
                                  we reviewed their position description when available to
                                  determine the amount of time they worked on the Grant.

                                  The position description for the Hospital’s former and current
                                  Wellness Services Directors showed that the Directors’ duties
                                  were limited to the Special Purpose Grant. However, the
                                  Directors said they spent approximately 10 percent of their time
                                  working on non-Grant activities such as attending the Hospital’s
                                  management meetings. Using the Directors’ estimates, we

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                                                                                        Finding 1


                                 determined that the Hospital overcharged the Grant $6,065 to
                                 pay the Directors’ salaries and fringe benefits.

                                 The current Coordinator for the Hospital said she spent all of
                                 her time working on the Special Purpose Grant’s activities.
                                 This was supported by the Coordinator’s position description
                                 that showed her duties were limited to the Grant. Based upon
                                 the Coordinator’s statement and her position description, we
                                 determined that the Hospital’s use of Grant funds to pay the
                                 Coordinator’s salary and fringe benefits was proper.

                                 The former Coordinator and the former Program Assistant
                                 were no longer employed by the Hospital; therefore, we were
                                 unable to ask them how much time they spent working on non-
                                 Grant activities. The position description for the former
                                 Coordinator showed that her duties were limited to the Grant.
                                 Therefore, we did not question the Hospital’s use of Grant
                                 funds to pay the former Coordinator’s salary and fringe
                                 benefits. The Hospital lacked a position description to detail
                                 the duties of the former Program Assistant. As a result, we
                                 questioned the Hospital’s use of $5,490 in Special Purpose
                                 Grant funds to pay the Assistant’s salary and fringe benefits.

                                 The Hospital’s former Vice President of Strategic Management
                                 said he was not aware that the Grant Agreement required the
                                 Hospital to comply with Office of Management and Budget
                                 Circular A-87 and maintain timesheets or other payroll
                                 documentation to support personnel expenses charged to the
                                 Grant. As a result, HUD lacks assurance that the salaries and
                                 fringe benefits paid by the Special Purpose Grant were
                                 reasonable and necessary expenses.

                                 The Hospital used $87,883 in Special Purpose Grant funds to
       The Hospital Improperly   pay 100 percent of one employee’s salary and fringe benefits
       Used Grant Funds To Pay   even though the employee was not included in the Special
       An Employee               Purpose Grant Agreement. The funds were used to pay the
                                 Hospital’s former Vice President of Strategic Management.
                                 The position was not included in the Agreement’s budget.

                                 The former Vice President of Strategic Management was
                                 responsible for providing management direction over the
                                 Hospital’s marketing/sales staff, public relations employees, and
                                 the employees for the Special Purpose Grant. He estimated

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  Finding 1


                           that he spent 50 percent of his time on non-Grant activities.
                           The former Vice President said it was necessary to reallocate
                           funds to pay his salary and fringe benefits in order to meet the
                           needs of the Grant. According to the former Vice President, he
                           was not aware that a revision request to HUD was required
                           before deviating from the Grant’s approved budget.

                           HUD’s Director of the Cleveland Multifamily Program Center
                           said his Office would not have approved a budget revision if
                           requested by the Hospital. He said the additional personnel
                           expenses to administer the Special Purpose Grant were
                           excessive. As a result, HUD funds were not effectively and
                           efficiently used.


       Auditee Comments    [Excerpts paraphrased from the Hospital’s comments on our
                           draft finding follow. Appendix B, page 29, contains the
                           complete text of the comments for this finding.]

                           The Hospital agrees that periodic certifications and appropriate
                           time studies to support the employee’s time spent on Grant
                           activities were not maintained. The dollar amounts of $6,065,
                           $5,490, and $87,883 will be reimbursed directly to the Special
                           Purpose Grant. For subsequent periods, time studies/periodic
                           certifications will be required for all personnel related to Grant
                           activities. These support documents will be completed on a
                           quarterly basis for two weeks each quarter. The addition of a
                           Compliance Officer along with other procedures will safeguard
                           the proper use of Grant funds.

       OIG Evaluation Of   The Hospital needs to assure that the procedures it plans to
       Auditee Comments    establish will ensure that its controls over the use of Special
                           Purpose Grant funds for personnel expenses meet the Grant
                           Agreement, HUD’s regulation, and/or Office of Management
                           and Budget Circular A-87. In regards to the reimbursement to
                           the Grant for the improper personnel expenses, the Hospital
                           needs to ensure that it uses non-Federal funds to complete the
                           reimbursement.



       Recommendations     We recommend that the Director of the Columbus Multifamily
                           Hub, Ohio State Office, assure that the Alliance Community
                           Hospital:

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                                                          Finding 1


       1A.        Provides documentation to support the $5,490 in
              unsupported salary and fringe benefits expense for the
              Wellness Services’ former Program Assistant. If
              documentation cannot be provided, the Hospital should
              reimburse its Special Purpose Grant OH12-SPG-517
              $5,490 from non-Federal funds.

       1B.    Reimburses its Special Purpose Grant OH12-SPG-517
              $93,948 ($6,065 for the former and the current
              Directors of Wellness Services and $87,883 for the
              former Vice President of Strategic Management) from
              non-Federal funds for the salaries and fringe benefits
              paid which were not in accordance with the Special
              Purpose Grant Agreement, Office of Management and
              Budget Circular A-87, and/or HUD’s regulation.

       1C.    Establishes procedures and controls to follow the
              Special Purpose Grant Agreement, HUD’s regulation,
              and Office of Management and Budget Circular A-87
              regarding the use of Special Purpose Grant funds.




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                                                                                                 Finding 2


        The Hospital Did Not Ensure That $21,035 In
          Program Income Supported The Grant’s
                         Activities
  The Alliance Community Hospital did not follow Special Purpose Grant Agreement OH12-SPG-517
  and HUD’s regulation to ensure that income directly generated by the Grant was used to support other
  Grant activities. The Hospital provided health care services to businesses participating in its Corporate
  Health Alliance activity that was funded by the Special Purpose Grant. Between January 1997 and
  January 1998, the Hospital received $21,035 in program income from the businesses that was not used
  to support the Grant. The Hospital lacked sufficient procedures and controls over the Special Purpose
  Grant to ensure that program income directly generated by the Grant supported other Grant activities.
  As a result, fewer funds were available to support the Grant’s activities.


                                          Paragraph I of Special Purpose Grant Agreement OH12-SPG-
       Federal Requirements               517, between HUD and the Alliance Community Hospital,
                                          required the Hospital to follow other applicable regulations such
                                          as 24 CFR Part 84, Grants and Agreements with Institutions of
                                          Higher Education, Hospitals, and other Non-Profit
                                          Organizations.

                                          24 CFR Part 84.2 defines program income as gross income
                                          earned by the recipient that is directly generated by a supported
                                          activity or earned as a result of the award. Program income
                                          includes income from fees for services performed.

                                          24 CFR Part 84.24(b) states in part that program income
                                          earned during the project period be retained by the recipient
                                          and, in accordance with HUD’s regulations or the terms and
                                          conditions of the award, be used in one or more of the following
                                          ways: added to funds committed to the project by HUD and
                                          used to further eligible project or program objectives; and/or
                                          deducted from the total project or program allowable cost in
                                          determining the net allowable costs on which the Federal share
                                          of costs is based.

                                          Contrary to the Special Purpose Grant Agreement and HUD’s
       The Hospital Did Not               regulation, the Alliance Community Hospital did not ensure that
       Ensure That Program                $21,035 in program income directly generated from the Special
       Income Supported The               Purpose Grant was used to support other Grant activities. The
       Grant’s Activities
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  Finding 2


                           Hospital provided health care services to businesses
                           participating in the Corporate Health Alliance supported with
                           Special Purpose Grant funds. The Hospital billed the
                           businesses for the services and received $25,056 in payment.
                           However, the Hospital only included $4,021 in program income
                           for the further benefit of the Grant’s activities.

                           The Hospital did not use the $21,035 ($25,056 less $4,021) in
                           program income to support the Special Purpose Grant’s
                           activities due to a change in an accounting procedure.
                           According to a Staff Accountant for the Hospital, the program
                           income was initially credited back to the Grant. In January
                           1997, she said the procedure was changed and the Grant’s
                           income was credited to a miscellaneous income account. The
                           Staff Accountant said she did not agree with the change at the
                           time it was made, but could not remember who made the
                           change or why the change was made. The program income
                           was ultimately deposited into the Hospital’s operating account
                           and used to pay non-Grant expenses. As a result, fewer funds
                           were available to support the Grant’s activities.


       Auditee Comments    [Excerpts paraphrased from the Hospital’s comments on our
                           draft finding follow. Appendix B, page 30, contains the
                           complete text of the comments for this finding.]

                           The Hospital agrees that the revenue should have been offset to
                           the Special Purpose Grant. To ensure that HUD’s regulation is
                           followed, all personnel responsible for Grant accounting will
                           become familiar with the regulation and any other that relate to
                           Grant distribution. The $21,035 will be reimbursed to the
                           Special Purpose Grant OH12-SPG-517.

       OIG Evaluation Of   The actions proposed by the Hospital, if fully implemented,
       Auditee Comments    should ensure that program income generated by the Grant
                           activities is accounted for properly and used in accordance with
                           HUD’s regulation. In regards to the reimbursement to the
                           Grant for the improper use of program income, the Hospital
                           needs to ensure that it uses non-Federal funds to complete the
                           reimbursement.




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                                                                               Finding 2



       Recommendations   We recommend that the Director of the Columbus Multifamily
                         Hub, Ohio State Office, assure that the Alliance Community
                         Hospital:

                         2A.     Reimburses its Special Purpose Grant (OH12-SPG-
                                 517) $21,035 from non-Federal funds for the use of the
                                 program income that did not support the Grant’s
                                 activities as required by the Special Purpose Grant
                                 Agreement and HUD‘s regulation.

                         2B.     Establishes sufficient procedures and controls to ensure
                                 that it follows the Special Purpose Grant Agreement
                                 and HUD’s regulation regarding the use of program
                                 income directly generated by the Special Purpose
                                 Grant.




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                                                                                                   Finding 3


         The Hospital Did Not Charge For $10,989 In
                       Grant Services
  Contrary to the Special Purpose Grant Agreement OH12-SPG-517 and Office of Management and
  Budget Circular A-87, the Alliance Community Hospital failed to use sound management principles
  when it did not charge itself for Grant services provided to its employees. The Hospital provided
  $10,989 in health care services to its employees and members of the Hospital’s Wellness Center for
  Women that participated in the Corporate Health Alliance activity funded by the Special Purpose Grant.
  However, the Hospital did not charge for the services as was its usual practice. The current Director
  and Coordinator of the Hospital’s Wellness Services, who administered the Grant, said they never
  discussed billing the Hospital for the services. As a result, the Hospital did not administer the Special
  Purpose Grant efficiently and effectively, and fewer funds were available to support the Grant’s
  activities.


                                          Article I, paragraph E of the Special Purpose Grant Agreement
       Federal Requirements               OH12-SPG-517, between HUD and the Alliance Community
                                          Hospital, required the Hospital to follow Office of Management
                                          and Budget Circular A-87, Cost Principles for State, Local,
                                          and Indian Tribal Governments.

                                          Office of Management and Budget Circular A-87, Attachment
                                          A, paragraph A(2)(a)(1), says grant recipients are responsible
                                          for the efficient and effective administration of Federal awards
                                          through the application of sound management practices.

                                          The Hospital used Special Purpose Grant funds to provide
       The Hospital Did Not               $10,989 in health care services to its employees and members
       Charge For Grant Services          of the Hospital’s Wellness Center for Women. The employees
       Provided                           and members were participants of the Corporate Health
                                          Alliance activity that was supported by the Grant. While the
                                          Hospital was permitted to use Grant funds to provide the
                                          services, the Hospital did not charge for the services as it did to
                                          all the other Health Alliance participants.

                                          Office of Management and Budget Circular A-87 required the
                                          Hospital to administer the Special Purpose Grant in an efficient
                                          and effective manner using sound management practices. Since
                                          the Hospital was a member of the Corporate Health Alliance
                                          activity, it should have charged for the services and billed the
                                          Hospital for the health care services provided with Grant funds.

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                           The Hospital lacked controls over the Special Purpose Grant to
                           ensure that all participants of the Corporate Health Alliance
                           were charged for services provided with Grant funds. The
                           current Director and Coordinator of the Hospital’s Wellness
                           Services, who administered the Grant, said they never
                           discussed billing the Hospital for the services. They said billing
                           the Hospital did not make sense because the Grant funds were
                           received by the Hospital. According to the Director and
                           Coordinator, they did not consider that the Grant funds were
                           not Hospital funds. As a result, the Hospital did not administer
                           the Special Purpose Grant efficiently and effectively, and fewer
                           funds were available to support the Grant’s activities.


       Auditee Comments    [Excerpts paraphrased from the Hospital’s comments on our
                           draft finding follow. Appendix B, page 30, contains the
                           complete text of the comments for this finding.]

                           It was the Hospital’s intent to apply sound management
                           practices in all Grant transactions. For this specific instance, it
                           was not common practice to charge our facility for services
                           performed within.

       OIG Evaluation Of   We believe that the Hospital should reimburse its Special
       Auditee Comments    Purpose Grant $10,989 from non-Federal funds for failing to
                           charge for the health care services provided to the Hospital’s
                           employees and members of its Wellness Center. The Hospital
                           also needs to establish controls to ensure that it follows the
                           Special Purpose Grant Agreement and Office of Management
                           and Budget Circular A-87 regarding the efficient and effective
                           administration of Grant funds through the use of sound
                           management principles.



       Recommendations     We recommend that the Director of the Columbus Multifamily
                           Hub, Ohio State Office, assure that the Alliance Community
                           Hospital:

                           3A.     Reimburses its Special Purpose Grant OH12-SPG-517
                                   $10,989 from non-Federal funds for failing to charge
                                   for the health care services provided to the Hospital’s
                                   employees and members of its Wellness Center for
                                   Women.

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       3B.     Establishes controls to ensure that it follows the Special
               Purpose Grant Agreement and Office of Management
               and Budget Circular A-87 regarding the efficient and
               effective administration of Grant funds through the use
               of sound management principles.




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                                                                                                      Finding 4


         The Hospital’s Use Of Special Purpose Grant
          Funds Did Not Support Its Grant Activities
  Contrary to the Special Purpose Grant Agreement OH12-SPG-517 and Office of Management and
  Budget Circular A-87, the Alliance Community Hospital used $8,926 in Grant funds for: public relations
  items that did not specifically promote its Grant activities, and training and travel expenses for individuals
  that were not employed by the Hospital. The Hospital’s former Vice President of Strategic
  Management said he was not aware that the Special Purpose Grant Agreement required the Hospital to
  follow Office of Management and Budget Circular A-87. As a result, HUD funds were not efficiently
  and effectively used.


                                            Article I, paragraph E, of the Special Purpose Grant Agreement
       Federal Requirements                 OH12-SPG-517, between HUD and the Alliance Community
                                            Hospital, required the Hospital to follow Office of Management
                                            and Budget Circular A-87, Cost Principles for State, Local,
                                            and Indian Tribal Governments.

                                            Office of Management and Budget Circular A-87, Attachment
                                            A, paragraph E(1), states in part that direct costs are those
                                            identified specifically with a particular final cost objective.
                                            Paragraph E(2)(b) says typical direct costs chargeable to
                                            Federal awards are the cost of materials acquired, consumed,
                                            or expended specifically for the purpose of those awards.
                                            Attachment B, paragraph 2(b) of the Circular, states in part that
                                            the term “public relations” includes community relations and
                                            means those activities dedicated to maintaining or promoting
                                            understanding and favorable relations with the community, the
                                            public at large, or any segment of the public. Paragraph 2(d)(1)
                                            says public relations costs are allowable when specifically
                                            required by the Federal award and then only as a direct cost.

                                            Attachment B, paragraph 41(a), of Office of Management and
                                            Budget Circular A-87 permits the use of Federal funds for
                                            travel by a recipient’s employees on official business.
                                            Paragraph 40 of Attachment B states that only the cost of
                                            employee training of the Federal award recipient is allowable.

                                            The Hospital used $8,522 in Special Purpose Grant funds for
       The Hospital Purchased               public relations items that did not specifically promote its Grant
       Items To Promote Itself              activities. The items included promotional pens, pencils,

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                                   litterbags, and stadium cups that contained the Hospital’s
                                   insignia. Contrary to Office of Management and Budget
                                   Circular A-87, the Hospital did not ensure that the public
                                   relations items specifically promoted the Grant activities. The
                                   items promoted only the Hospital.

                                   The Hospital used $254 in Special Purpose Grant funds to
       The Use of Grant Funds      purchase airline tickets for two individuals to attend an
       Did Not Support The Grant   informational meeting in Indianapolis, Indiana. The meeting was
       Activities                  held with a supplier to the Hospital’s Corporate Health Alliance
                                   program funded with Grant funds. However, the two
                                   individuals were not employees of the Hospital. The Hospital
                                   was not permitted to use Grant funds to pay for the two
                                   individuals’ airline tickets according to Office of Management
                                   and Budget Circular A-87.

                                   The Hospital also used $150 in Special Purpose Grant funds to
                                   pay the training expenses for two individuals that were not
                                   employees of the Hospital. Office of Management and Budget
                                   Circular A-87 prohibited the Hospital from using Grant funds to
                                   pay for the non-employees’ training expenses. The training was
                                   provided to an Industrial Nurse of an area business and the
                                   Director of Human Resources for a local college to attend a
                                   one-day wellness conference.

                                   The Hospital’s former Vice President of Strategic Management
                                   said he was not aware that the Special Purpose Grant
                                   Agreement required the Hospital to follow Office of
                                   Management and Budget Circular A-87. He also said he was
                                   not aware that Circular A-87 did not permit Federal funds to be
                                   used to pay for public relations items that did not specifically
                                   promote the Federal award or to pay expenses of individuals
                                   that were not employees of the Hospital. As a result, HUD
                                   funds were not effectively and efficiently used.


        Auditee Comments           [Excerpts paraphrased from the Hospital’s comments on our
                                   draft finding follow. Appendix B, pages 31 and 32, contains
                                   the complete text of the comments for this finding.]

                                   The Hospital agrees that Grant funds were expended for non-
                                   Hospital employee training and travel, which did not follow
                                   Office of Management and Budget Circular A-87. The $404

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                           relating to those costs will be reimbursed to the Special Purpose
                           Grant OH12-SPG-517.

                           To ensure that the Hospital follows the Special Purpose Grant
                           Agreement and Office of Management and Budget Circular A-
                           87, a procedure will be initiated where personnel responsible
                           for administering Grant funds will be required to become
                           familiar with Circular A-87 and any other Federal regulations
                           relating to the distribution of Grant monies. Subsequent to the
                           awarding of the Special Purpose Grant OH12-SPG-517, a
                           Director of Compliance was appointed. This individual has the
                           necessary credentials to assist personnel responsible for Grant
                           monitoring.

                           In regards to the $8,522 in public relation items, the Hospital
                           contends that when originally purchased a portion of these items
                           were solely intended for Special Purpose Grant use. It seems a
                           portion of this inventory was inadvertently utilized for other than
                           Grant activities. The $8,522 will be reimbursed to the Special
                           Purpose Grant OH12-SPG-517.

                           The Hospital believes that it implemented procedures to
                           safeguard the effective and efficient use of HUD funds for the
                           future. As in the past, the Hospital appreciates the ability to
                           utilize HUD Grant funds to provide quality medical services in
                           its community.

       OIG Evaluation Of   The actions planned by the Hospital, if fully implemented,
       Auditee Comments    should ensure that Special Purpose Grant funds are used in
                           accordance with the Grant Agreement and Office of
                           Management and Budget Circular A-87. In regards to the
                           reimbursement to the Grant for the improper use of Grant funds,
                           the Hospital needs to ensure that it uses non-Federal funds to
                           complete the reimbursement.


       Recommendation      We recommend that the Director of the Columbus Multifamily
                           Hub, Ohio State Office, assure that the Alliance Community
                           Hospital:

                           4A.     Reimburses its Special Purpose Grant OH12-SPG-517
                                   $8,926 ($8,522 for the public relations items, $254 for
                                   the airline tickets, and $150 for the training expenses)

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                         from non-Federal funds for the use of Grant funds
                         which was not in accordance with the Grant Agreement
                         and Office of Management and Budget Circular A-87.

                 4B.     Establishes procedures and controls to ensure that it
                         follows the Special Purpose Grant Agreement and
                         Office of Management and Budget Circular A-87
                         regarding the use of Grant funds.




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  Management Controls
  In planning and performing our audit, we considered the management controls of the Alliance
  Community Hospital in order to determine our auditing procedures, not to provide assurance on the
  controls. Management controls include the plan of the organization, methods, and procedures adopted
  by management to ensure that its goals are met. Management controls include the processes for
  planning, organizing, directing, and controlling program operations. They include the systems for
  measuring, reporting, and monitoring program performance.



                                        We determined the following management controls were
       Relevant Management              relevant to our audit objectives:
       Controls
                                        •   Program Operations - Policies and procedures that
                                            management has implemented to reasonably ensure that a
                                            program meets its objectives.

                                        •   Validity and Reliability of Data - Policies and procedures
                                            that management has implemented to reasonably ensure that
                                            valid and reliable data are obtained, maintained, and fairly
                                            disclosed in reports.

                                        •   Compliance with Laws and Regulations - Policies and
                                            procedures that management has implemented to
                                            reasonably ensure that resource use is consistent with laws
                                            and regulations.

                                        •   Safeguarding Resources - Policies and procedures that
                                            management has implemented to reasonably ensure that
                                            resources are safeguarded against waste, loss, and misuse.

                                        We assessed all of the relevant controls identified above.

                                        It is a significant weakness if management controls do not
                                        provide reasonable assurance that the process for planning,
                                        organizing, directing, and controlling program operations will
                                        meet an organization’s objectives.

                                        Based on our review, we believe the following items are
       Significant Weaknesses           significant weaknesses:

                                        •   Program Operations.


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                        The Hospital was not operated according to program
                        requirements. Specifically, the Hospital: improperly used
                        $6,065 in Special Purpose Grant funds (OH12-SPG-517) to
                        pay part of two employees’ salaries and fringe benefits for time
                        they spent working on non-Grant activities; used $5,490 in
                        Grant funds to pay an employee’s salary and fringe benefits
                        without supporting documentation; did not maintain periodic
                        certifications that the employee worked solely on Grant
                        activities, or personnel activity reports to support the
                        employee’s time spent on the Grant and non-Grant activities;
                        used $87,883 in Grant funds to pay the Vice President of
                        Strategic Management’s salary and fringe benefits that were not
                        permitted by the Grant Agreement; received $21,035 in
                        program income from businesses participating in its Corporate
                        Health Alliance activity funded by the Grant but the income was
                        not used to support the Grant; failed to use sound management
                        principles when it did not charge itself for $10,989 in Grant
                        services provided to its employees; and used $8,926 in Grant
                        funds for public relations items that did not specifically promote
                        its Grant activities, and training and travel expenses for
                        individuals that were not employed by the Hospital (see
                        Findings 1, 2, 3, and 4).

                        ·   Compliance with Laws and Regulations

                        The Hospital did not follow HUD’s regulations and/or Office of
                        Management and Budget Circular A-87 regarding personnel
                        expenses, program income, sound management practices,
                        public relations expenses, and training and travel costs (see
                        Findings 1, 2, 3, and 4).

                        ·   Safeguarding Resources

                        The Hospital improperly used: $6,065 in Special Purpose Grant
                        funds (OH12-SPG-517) to pay part of two employees’ salaries
                        and fringe benefits for time they spent working on non-Grant
                        activities; $5,490 in Grant funds to pay an employee’s salary
                        and fringe benefits without supporting documentation; $87,883
                        in Grant funds to pay the Vice President of Strategic
                        Management’s salary and fringe benefits that were not
                        permitted by the Grant Agreement; and $8,926 in Grant funds
                        for public relations items that did not specifically promote its

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                                                 Management Controls


       Grant activities, and training and travel expenses for individuals
       that were not employed by the Hospital. (see Findings 1 and 4).
       The Hospital also received $21,035 in program income from
       businesses participating in its Corporate Health Alliance activity
       funded by the Grant but the income was not used to support the
       Grant, and failed to use sound management principles when it
       did not charge itself for $10,989 in Grant services provided to
       its employees (see Findings 2 and 3).




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  Follow Up On Prior Audits
  This is the first audit of the Alliance Community Hospital’s Special Purpose Grants (OH12-SPG-32,
  OH12-SPG-509, and OH12-SPG-517) by HUD’s Office of Inspector General. The latest single audit
  report for the Hospital covered the fiscal year ended December 31, 1997. The report did not contain
  any findings.




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                                                                                      Appendix A

  Schedule Of Questioned Costs

                  Recommendation            Type of Questioned Costs
                      Number              Ineligible 1/ Unsupported 2/

                          1A                                   $5,490
                          1B              $ 93,948
                          2A                21,035
                          3A                10,989
                          4A                  8,926
                         Total            $134,898             $5,490


  1/   Ineligible costs are costs charged to a HUD-financed or insured program or activity that the
       auditor believes are not allowable by law, contract, or Federal, State, or local policies or
       regulations.

  2/   Unsupported costs are costs charged to a HUD-financed or insured program or activity and
       eligibility cannot be determined at the time of the audit. The costs are not supported by
       adequate documentation or there is a need for a legal or administrative determination on the
       eligibility of the cost. Unsupported costs require a future decision by HUD program
       officials. This decision, in addition to obtaining supporting documentation, might involve a
       legal interpretation or clarification or Departmental policies and procedures.




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                                                                                                 Appendix B

  Auditee Comments




  March 2, 2001


  Mr. Heath Wolfe
  Assistant Dist. Inspector General
  For Audit, Midwest
  HUD, Ofc of Inst Gen for Audit, Midwest
  Ralph H. Metcalfe Federal Building
  77 W. Jackson Blvd., Suite 2646
  Chicago, IL 60604-3507

  Dear Mr. Wolfe:

  In response to the draft proposal “The Hospital Improperly Used Grant Funds to Pay Personnel
  Expenses.” Alliance Community Hospital does agree that periodic certifications and appropriate time
  studies to support the Employee’s time spent of Grant Activities were not maintained.

  The dollar amounts of $6,065, $5,490 and $87,883 will be reimbursed directly to our Special Purpose
  Grant funds, per your recommendations.

  For subsequent periods, time studies/periodic certifications will be required for all personnel related to
  Grant Activities. These support documents will be completed on a quarterly basis for two weeks each
  quarter.

  As with other findings I believe the addition of a Compliance Officer along with other procedures will
  safeguard the proper use of Grant funds.

  If you should have any questions, please contact me at 330-829-4344.

  Sincerely

  /signed/

  Joan Platzer
  CFO

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  Appendix B




  February 23, 2001


  Mr. Heath Wolfe
  Assistant Dist. Inspector General
  For Audit, Midwest
  HUD, Ofc of Inst Gen for Audit, Midwest
  Ralph H. Metcalfe Federal Building
  77 W. Jackson Blvd., Suite 2646
  Chicago, IL 60604-3507

  Dear Mr. Wolfe:

  In response to finding “The Hospital Did Not Ensure That $21,035 In Program Income Supported The
  Grant’s Activities,” Alliance Community Hospital does agree that this revenue should have been offset
  to the Special Purpose Grant.

  To ensure that this regulation is followed in further periods all personnel responsible for grant accounting
  will become familiar with this rule and any other that relate to Grant Distribution. The $21,035 will be
  reimbursed to our Special Purpose Grant OH12-SPG-517 per your recommendation.

  In response to finding “The Hospital Did Not Charge For $10,989 In Grant Services.” It is felt that it
  was Alliance Community Hospital’s intent to apply sound management practices in all grant transactions.

  For this specific instance it was not common practice to charge our facility for services performed
  within.

  If you should have any questions, please contact me at 330-829-4344.

  Sincerely

  /signed/

  Joan Platzer
  CFO

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                                                                                               Appendix B




  February 13, 2001


  Mr. Heath Wolfe
  Assistant District Inspector General
  For Audit, Midwest
  U.S. Dept. of Housing & Urban Development
  Office of Inspector General for Audit, Midwest
  Ralph H. Metcalfe Federal Building
  77 W. Jackson Blvd., Suite 2646
  Chicago, IL 60604-3507

  Dear Mr. Wolfe:

  In response to the first draft audit findings at the Office of the Inspector General for Audit, HUD,
  Alliance Community Hospital does agree that Grant funds were expended for non-hospital employee
  training and travel, which does not follow Budget Circular A-87. The $404.00 relating to those costs
  will be reimbursed to our Special Purpose Grant OH12-SPG-517.

  To ensure that Alliance Community Hospital follows the Special Purpose Grant Agreement and Office
  of Management and Budget Circular A-87, a procedure will be initiated where personnel responsible
  for administering Grant funds will be required to become familiar with Budget Circular A-87 and any
  other Federal regulations relating to the distribution of Grant monies. Also, subsequent to the awarding
  of this Grant a Director of Compliance was appointed. This individual does have the necessary
  credentials to assist personnel responsible for Grant monitoring.

  In response to the finding that the Hospital used $8,522.00 in Grant funds for public relation items that
  did not specifically promote its Grant activities, Alliance Community Hospital contends that, when
  originally purchased, a portion of these items were solely intended for Special Purpose Grant use. It
  seems a portion of this inventory was inadvertently utilized for other than Grant activities. The
  $8,522.00 will be reimbursed to the Special Purpose Grant OH12-SPG-517. As mentioned above the
  same procedures and controls will be put in place to ensure compliance with this Grant.




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  I believe that we have implemented procedures to safeguard the effective and efficient use of HUD
  funds in the future. As in the past, we appreciate the ability to utilize HUD Grant funds to provide
  quality medical services in our community.
  Sincerely,

  /signed/

  Joan Platzer
  Chief Financial Officer

  JP:cj




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                                                                                    Appendix C

       Distribution
       Acting Secretary's Representative, Midwest (2)
       Senior Community Builder/State Coordinator, Ohio State Office
       Senior Community Builder/Coordinator, Cleveland Area Office
       Director of Columbus Multifamily Hub, Ohio State Office (2)
       Director of Cleveland Multifamily Program Center, Cleveland Area Office
       Secretary, S (Room 10000)
       Chief of Staff, S (Room 10000)
       Acting Assistant Secretary for Administration, A (Room 10110)
       Deputy Assistant Secretary for Administrative Services, Office of the Executive
               Secretariat, AX (Room 10139)
       Acting Assistant Secretary for Congressional and Intergovernmental Relations, J (Room
               10120)
       Director of Departmental Equal Employment Opportunity, U (Room 2112)
       Senior Advisor to the Secretary, Office of Public Affairs, W (Room 10132)
       Deputy Chief of Staff for Policy and Program, S (Room 10226)
       Deputy Chief of Staff for Intergovernmental Affairs, S (Room 10226)
       Deputy Assistant Secretary for Public Affairs, W (Room 10222)
       Special Assistant for Inter-Faith Community Outreach, S (Room 10222)
       Executive Officer for Administrative Operations and Management, S (Room 10220)
       General Counsel, C (Room 10214)
       Deputy General Counsel for Housing, Finance, and Operations, CA (Room 10240)
       Assistant General Counsel, Midwest
       Assistant Secretary for Housing-Federal Housing Commissioner, H (Room 9100)
       General Deputy Assistant Secretary for Housing-Deputy Federal Housing Commissioner, H
           (Room 9100)
       Assistant Secretary for Policy Development and Research, R (Room 8100)
       Assistant Secretary for Community Planning and Development, D (Room 7100)
       Executive Vice President of Government National Mortgage Association, T (Room 6100)
       Assistant Secretary for Fair Housing and Equal Opportunity, E (Room 5100)
       Chief Procurement Officer, N (Room 5184)
       Acting Deputy Assistant Secretary for Multifamily Housing Programs, HT (Room 9100)
       Deputy Assistant CFO for Financial Management, FM (Room 2206)
       Audit Liaison Officer for Multifamily Housing, HQCGT (Room 3136)
       Chief Information Officer, Q (Room 8206)
       Director of Departmental Operations and Coordination, I (Room 2124)
       Acting Chief Financial Officer, F (Room 2202)
       Deputy Chief Financial Officer, F (Room 2202)
       Director of Audit Coordination/Departmental Audit Liaison Officer, FMA (Room 2206)
       Director of Risk Management, FMR (Room 2214)
       CFO Audit Liaison Officer, FMA (Room 2206)
       Audit Liaison Officer, 3AFI (2)

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       Acting Director of Enforcement Center, V (200 Portals Building)
       Acting Director of Real Estate Assessment Center, X (1280 Maryland Avenue, SW,
               Suite 800)
       Director of Multifamily Assistance Restructuring, Y (4000 Portals Building)
       Acting Assistant Deputy Secretary for Field Policy and Management, SDF (Room 7108)
       Acquisitions Librarian, Library, AS (Room 8141)
       Staff Director, Subcommittee on Criminal Justice, Drug Policy & Human Resources, B 373
           Rayburn House Office Building, Washington DC 20515
       The Honorable Fred Thompson, Chairman, Committee on Governmental Affairs, 340
               Dirksen Senate Office Building, United States Senate, Washington DC 20510
       The Honorable Joseph Lieberman, Ranking Member, Committee on Governmental Affairs,
               706 Hart Senate Office Building, United States Senate, Washington DC 20510
       Honorable Dan Burton, Chairman, Committee on Government Reform, 2185 Rayburn
               Building, United States House of Representatives, Washington DC 20515
       Henry A. Waxman, Ranking Member, Committee on Government Reform, 2204 Rayburn
               Building, United States House of Representatives, Washington DC 20515
       Ms. Cindy Fogleman, Subcommittee on Oversight and Investigations, Room 212, O'Neil
               House Office Building, Washington DC 20515
       Associated Director of Resources, Community, and Economic Development Division,
           United States General Accounting Office, 441 G Street N.W., Room 2T23, Washington
           DC 20548 (Attention: Stanley Czerwinski)
       Steve Redburn, Chief of Housing Branch, Office of Management and Budget, 725 17th
           Street, N.W., Room 9226, New Executive Office Building, Washington DC 20503
       Chief Executive Officer, Alliance Community Hospital




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